In logistics and supply chain management, there is always a constant search for optimizing business operations and meeting the growing demands of customers. In recent years, one method that has commonly been discussed is blind shipment. What is a blind shipment and why are more and more companies using this strategy?
Simply put, a blind shipment means that the seller won’t have to come in contact with the buyer, and vice versa. This method keeps customer details private, reduces competition, and streamlines the supply chain, all while protecting sensitive business relationships. Typically, the consignee (the person receiving the goods) is unaware of the origin, while the supplier or shipper might not know the final destination.
Another step further is the double blind shipment, where both the shipper and consignee are blind to each other’s identity. This is critical for the middle party in highly competitive industries.
How Does a Blind Shipment Work?
The concept of blind shipment in logistics may seem complicated. But trust us, the process is straightforward when you break it down. Its main objective is to conceal necessary information between the buyer and seller.
We know the bill of lading (BOL) is a receipt of goods, listing the shipping details about the shipper and consignee, but for blind shipping, the BOL is carefully modified to hide or show certain information.
There are three different situations:
Blind BOL for Customer
If you (as the middle party or distributor) don’t want your customer to know the identity or location of your actual supplier, you can list yourself as the shipper on the BOL provided to the consignee, your customer. So the customer doesn’t know who is the real supplier even though your goods are sent from the supplier to your customer directly.
Blind BOL for Supplier
If you don’t want your supplier to know who your end customer is, to protect your customer list or margins, make yourself the final receiver on the BOL for the supplier.
Double Blind Shipment
If you want to keep both your supplier and your customer unaware of each other, this is called a double blind shipment. In this case, the BOL for the supplier lists you as the consignee, meanwhile the BOL for the customer shows you as the shipper. The carrier must be instructed very carefully to ensure that no information is shared.
In addition, you should understand that no matter who the blind party is, the BOL used by the carrier should still show the actual shipping and delivery details to ensure proper transportation and customs compliance.
Apart from these BOLs, you might need additional paperwork to complete the shipping process. That is why it is important to communicate with your local freight forwarder before the goods are dispatched.
Advantages of Blind Shipments
Blind shipping actively optimizes supply chain management while helping distributors in transporting goods conveniently. Here’s why many companies are opting for blind shipment:
Protection of Business Relationships
One of the major reasons is to protect their customer and supplier relationships. For example, by concealing the identity of the supplier, companies are aiming to prevent customers from bypassing them and going directly to the supplier.
This is an important strategy considering the price sensitivity of the market is currently very high. Customers are always on the lookout for better and cheaper alternatives by getting in contact with the direct source.
Secure Drop Shipping
Blind shipping allows sellers to maintain a steady supply chain. It plays a significant role in drop shipping when companies sell products without physically handling the products, making sure that the control over transactions is maintained by the seller.
Maintaining Competitive Market Advantages
If you’ve been having a successful business recently, you might notice your competitors starting to take an interest in your products. To maintain a competitive advantage, keeping your business original and avoiding any copycat sellers is crucial.
By using double blind shipments, you can keep your business aligned with the competitive market to gain the advantage of all your hard work.
Challenges of Blind Shipments
While the blind shipping offers a wide range of benefits, it also comes with challenges. Here are some of the common issues that you may face while using blind shipping:
Excessive Paperwork
There may be a lot of paperwork and work involved in sending a blind shipment. You will have to carefully document and include a blind bill of lading. Any mistake in the documentation process can lead to additional costs and delays in the order. Documentation usually contains the BOLs, a packing list, and a commercial invoice.
Lack of Information
Customers these days are especially more particular about the details, like what the manufacturer’s name is and where the product is coming from. In today’s modern age, the sum of this information may already be available at the customers’ fingertips. They may simply look up the product details and easily make direct contact with the manufacturer if they have any queries about the product.
Refund Limitations
Considering the customers don’t have the complete information of the shipper, they may have a hard time asking for a refund. This can happen in cases where the product is at fault and should have been discarded by the seller in the first place. As a result, this may lead to customer dissatisfaction and trust issues, lowering the chances of them buying again.
Higher Shipping Cost
In some cases, blind shipping may lead to higher shipping costs because of additional coordination required during the process. The amount may vary from provider to provider.
Is Blind Shipping Legal?
Yes, not only is blind shipment legal, but they have become quite popular with the rising trend in trucking and logistics.
It is important to make sure that the unique rules of each carrier are also met regarding any restrictions before initiating blind shipping. Some carriers have their own set of rules that make sure the order is received with the right billing address, while no information is leaked along the way.
These restrictions may include requiring upfront payment before processing the shipment or enforcing specific delivery instructions.
How to Set Up a Blind Shipment?
As complicated as it sounds, the process isn’t that hard. Just make sure your shipping is followed with proper documentation to make the process seamless:
Contact a Freight Broker
The first step to arrange the blind shipping is to get in contact with a freight forwarder. The logistics are mainly taken care of by the freight forwarder or shipping carrier whom you have hired. These experienced professionals, like Foresmart, manage the shipping process and keep the blind shipment smooth.
Creating BOLs
Then the distributor prepares different BOLs as mentioned above with specific purposes. The master BOL is used when the carrier receives the cargo and starts shipping, containing all the pertinent shipping information. There are also other BOLs for your supplier and customer, with certain identity information covered.
Shipping Check
Make sure the carrier does not disclose origin or destination details to the supplier or consignee. The labels on your goods should also match the blind BOL. You can use a neutral warehouse to switch labels without the supplier or customer noticing.
What Industries Use Blind Shipments?
Blind shipments are commonly used in different industries, such as wholesale and distribution, construction, e-commerce, food and beverages, house appliances, and many more. More and more industries are shifting from traditional shipping to blind shipping.
Conclusion: Is Blind Shipping Right for Your Business?
Confidentiality matters in the competitive market. Using blind shipment in logistics provides many advantages for businesses that want to protect their supplier and customer relationships.
It is important to study the benefits and align them with your business goals. Whether blind shipping is the right choice for you depends on your business needs, industry, and the level of confidentiality you require.
FAQs
What is the difference between blind shipments and double blind shipments?
A blind shipment hides either one of the involved parties’ information: the supplier or the consignee. Whereas a double blind shipment is used to hide information from both sides from each other.
Why do companies use blind shipments?
Companies are more actively using blind shipping to protect customers from coming into contact with the supplier. It maintains confidentiality and prevents competitors from gaining important information.
